Labour, carbon tax to lift Newmont costs

Newmont Mining
, one of the world’s largest goldminers, has blamed higher labour and power prices and Australia’s looming carbon tax for a forecast rise in costs this year.

In its 2012 outlook on Tuesday, Denver-based Newmont said it expected production costs to increase to $US625-675 per ounce of gold, from $US560-590 an ounce in 2011.

Newmont Asia Pacific, which includes a half-share in the Kalgoorlie Super Pit and the giant Boddington gold mine in Western Australia, had the highest costs of all the company’s divisions last year at $US800-850 an ounce.

Company spokesman Omar Jabara said the cost increase was largely due to higher labour and power prices in Australia and New Zealand. He added that the carbon tax, which comes into effect from July 1, would add about $US15 an ounce to the cost of gold production.

Newmont Asia Pacific senior vice president Jeff Huspeni yesterday provided further detail on the expected impact of the new tax in an emailed statement. “Our estimated carbon liability for the last six months of 2012 is about $18 million rising to in excess of $35 million for the full 12 months of 2013," Mr Huspeni said.

The impact is roughly in line with that predicted by other major goldminers, Barrick Gold and Newcrest Mining. Despite this and the expected increase this year, Mr Huspeni said Newmont remained committed to the region.